Business loans in Mumbai are tailored to your personal needs. The extra capital obtained from loans helps the business operate smoothly. The business loans also assist in managing the flow of cash. You must ensure what your needs are before taking a loan. Business loans are available at low interest rates and with flexible repayment tenure. Maintaining a high credit score gives you an advantage while applying for a business loan. A CIBIL score of 750 is considered a good credit score.
A small-scale business owner requires extra funds to expand their business. As a budding entrepreneur, you must assess the financial health of your business. The loan can be a boon or bane depending on its use. If one is not careful in utilising the loan, it can cause a burden leading to debt.
At times, you don’t have a good credit history that can stop you from taking a loan. In such a scenario, funds from friends and crowdfunding campaigns can help startups. As mentioned by Forbes, consider repayment terms and flexibility of funds while taking a loan.
List of documents to apply for a business loan
Before applying for a business loan, you should do an in-depth study of the procedure followed. There are various documents needed for a business loan. Refer to the table below for the same:
| Identity proof | PAN Card or valid identity proof—either for an individual or a company |
| Address proof | Voter ID, Ration Card, Passport, or Driving License |
| Bank statement | Updated recent 6-month bank statement |
| Income documents | The latest 2 years ITR along with the computation of income, balance sheet, and profit & loss account for the past two years. This has to be submitted after the requisite CA certification. |
| Continuation proof | ITR/Trade Licence/ Establishments/Sales Tax Certificate |
| Other documents | Sole Proprietorship Declaration or Certified Copy of the Partnership Deed & the Broad Resolution. |
How to Apply
Follow the application process for a business loan. There are generally 5 steps followed to easily apply for a loan.
- Fill in basic details: You begin with the application process here. Click on the business loan or SME Loan based on the requirements. Fill in the asked details and submit documents as mentioned. Afterwards, select the amount of loan you want to take. Lastly, enter the tenure of the loan you desire to take.
- Await for the response: once you have filled in all the details as asked, you receive an answer. The answer will either be positive or negative. This decision is usually made instantly after submitting the required documents. If the answer is yes, it means your application is submitted successfully. Now, you receive a reference number for future communication purposes.
- Provide additional information, if required: The next step involves multiple verifications, including document & physical address verification. These steps ensure accuracy and validity in the application process.
- Loan approval: after successful verification of your application, the loan is approved. A customised offer is made for you. This loan offer has details of your tenure and rate of interest. Now you have to accept the offer made by the bank or NBFC.
- Disbursal of the loan: once you receive the offer letter, you accept it. Afterwards, the loan amount is disbursed to your account. Now, you can easily access the funds for your business requirements.
The Conclusion
To sum it up, business loans are beneficial to expand your small-scale business. It helps in the smooth operation and management of capital. With extra funds available, you can delve into new resources for your business. To avail of a business loan, you are required to submit the documents as mentioned by the lender. These documents are essential to ensuring accuracy and validation. The required documents also decide the amount of loan that can be availed to you. Therefore, you should be critical while submitting such documents for the business loan.